SAN FRANCISCO - Amazon.com Inc is testing a new monthly option for its popular Prime video-streaming service as the world's largest Internet retailer steps up competition with Netflix Inc.
Prime typically costs $79 a year for free two-day shipping, free video streaming and access to Amazon's Kindle e-book lending library.
The company is offering the service for $7.99 a month on its website, which works out to $95.88 a year, but at that rate it can be purchased strictly on a month-to-month basis.
The monthly option is more comparable to Netflix's streaming video subscription, which also costs $7.99 a month, but does not come with free shipping and an e-book library. Another streaming rival, Hulu, also charges $7.99 a month.
An Amazon spokesman said the monthly Prime option was a test and declined to comment.
Netflix and Hulu offer greater video selection than Amazon, though Amazon is spending hundreds of millions of dollars buying more content from Hollywood and TV studios.
Amazon's new monthly Prime option coincides with the holiday shopping season, giving shoppers a way to use the two-day shipping service for gifts without the annual obligation, said Colin Sebastian, an analyst at Baird Equity Research.